You kind of live in a very interesting part of the market. I want to start with trucks and engines on trucks and I'm
wondering when we're gonna get to the point where we can have 25 percent or more e these in trucks and buses because that would
be truly a game changer for decarbonisation. Alex thanks so much for having me and thanks for your question.
Trucks and buses are a big component of fuel usage and therefore CO2 generation. And so getting those products down from a carbon
point of view is critical to meeting our our goals both as a country and of course as the world. And Cummins is dedicated to
that topic. And the one thing I would like to say is that even ISE are an important part of that strategy. But the truth is we
can't wait until these are cost effective. And where there's enough infrastructure we need to start lowering carbon today. So
one of the things that Cummins has been emphasizing is the idea of a path to zero and that in order to meet our climate change
goals we need to start getting on the past day. So we're offering technologies today that reduce the clues current
climate warming gases right away CO2. And then we move to hybrids. Then we move to electric vehicles. Then we move to fuel
cells. We keep moving down the carbon producing technologies until we meet zero. But start today. Don't wait.
Tom good morning. It's guy in London. What do you need to hear from the politicians. What did the politicians need to deliver.
Up in Glasgow for that process to happen as you lay it out and maybe for it to be accelerated. Guy thanks for your question and
nice to talk with you. Here's what I would say is that existential crisis of our time climate change. We all have to be
in it. The politicians the businesses consumers we all have to be in it for real. And so what we'd like to see from politicians
is a regulatory structure that emphasizes reducing carbon. That of course means not only investments in technology. It does mean
that but it also means we have to internalize the externality which is carbon. That means carbon tax some kind of cost on
carbon. It also means regulations that drive action today. They don't wait until everything is perfect and all electric vehicles
are available everywhere and there's charging infrastructure everywhere they start. Now
when you take a look at the future China seemingly betting quite big on hydrogen fuel cell technology. It feels like the U.S. is
betting more just on battery electric. What does the mix look like. Can we say 2030 or 2050.
It's Alex. I think it's a mistake to bet on any single thing. We need all these technologies. The Hydrogen Council which Cummins
is a member of has done a study that shows that if we have multiple infrastructures hydrogen and electric vehicles we
actually it's cheaper to build the infrastructure it's more robust and likely to produce better results. So our argument
here is for the existential crisis of your time invest in all those technologies. Don't choose today before they're there.
Right. Get going on all of them. And so I I do agree that that that China and Europe frankly have made more investments and
hide your gin in the early stage. I think the U.S. has time to catch up and now's the time. That's one of the reasons you
supported the build back better program. There is there are incentives in there to start building out the hydrogen economy.
Tom do you think this is all going to be inflationary. You know that's hard to say. I guess on the one hand I'd say
maybe on the other hand it's again we all are going to survive or not survive by whether or not we can sustain our planet. So
we need to invest in these things. We need to move towards a lower carbon economy. And there will be shocks along the way.
There will be increases in prices. There will be dislocations. I mean how can there not be. But we've survived those before.
Innovations can get us through that. And I believe that the industry is ready to take this on. We just need to get moving.
Well Tom let me ask it in a different way when we're finally a critical mass here. What's the margin profile. First say
hydrogen battery electric trucks versus traditional I.C.E. vehicles.
You know at Cummins innovation has kind of been at our core for 100 years. The employees at Cummins they want to innovate to
solve these problems. Our view is if we do good innovation we give customers solutions to both their economic and
sustainability problems. We'll get paid to do it. If we don't come up with good solutions we won't. So it's tough play right.
By the way as the CEO of the company I need to figure out how we're going to earn margins how we're going to earn a return. I
worry about that every day. But I also believe that if we do a good job on this innovation and if we solve the real problems of
today's customers we will get paid. And we believe that these problems these feel how to turn an economy from a high carbon
economy into a low one is one of those problems. So we are full speed working on it.
Do you think there are going to be supply bottlenecks that are going to impede our path towards these targets. Tom was
suffering at the moment because we simply can't get the chips. We need to build the vehicles that we once. Do you see that as a
short term phenomenon. What is going on right now in terms of the supply chains and how will these supply chains be affected
as we make these energy transitions. Supply chain definitely a short and even medium term phenomena phenomenon especially with
electronics and integrated circuits. And I believe there'll will be more supply chain dislocations as we move to a world that's
going to demand different technologies to solve the world's problems. There's no question about it. But again I would put
that in the scale of things that industry needs to work out. Investments need to work out. I just want to I want to build a
planet that our kids and grandkids can live in. There'll be some supply shocks. But but again all of us should be focused on the
task at hand which is getting our technologies our regulatory infrastructure moving towards a low carbon economy. Get moving.
Solve the small problems later solved. Even the mediums those problems later. But get moving now. Tom before we let you go.
That's where the long term issues as we saw a shift here. I just. Get your take on the short term supply issues. When do you
see the chip shortage. Easing the conversation last week was there. Maybe we've hit bottom here. What do you see from where
you sit. Right now I see a whole lot of problems. A lot of shortages everywhere and a lot of challenges. But you know these
are challenges that I believe industry can work through. We will have to as an industry invest in automotive grade
chips and wafers and all that supply chain that supports that. We are going to have to invest in in in building capacity back
that we lost during the pandemic. That's going to take some time. But but all of us are committed to it. We will do it. I
wouldn't know if I could call it short term yet because I can't quite see the end of it. But we are investing to do it. And I do
think the longest lead time has an increased capacity of semiconductors.